Coins

Rich Reward: Collection dispersed after 200 years

December 2008, Volume 45 No. 12

A slice of life.

In last month’s magazine John Andrew highlighted the St James’s auction of November 6 and in particular the unique Russian Elizabeth I gold 20 roubles that was being offered. In his report John said that it seemed “likely that the unique 1755 gold 20-roubles will exceed the record US$603,750 that an 1825 pattern silver rouble of Grand Duke Constantine realised in New York in January 2004”. That was, it now turns out, something of an understatement! Literally as we go to press (the original Editor’s Comment hastily scrapped on the news) we learn that in fact this stunning coin made an incredible hammer price of £1.55 million! This figure not only exceeds the previous record for a Russian coin but totally eclipses it, eclipsing too the previous record for a coin sold in a British saleroom—the £460,000 for the double leopard sold in 2006. Of course, any collector who has been watching the market in recent months will realise that Russian pieces have been fetching some incredible prices every time they are offered—the same is true in the medal world—but this was beyond all expectations and once again shows that whilst certain sectors of the economy may be experiencing a “credit crunch” the top end of the coin market certainly isn’t.

Of course, many readers will look at this result and wonder what the relevance is to them, after all most of us will never have £1.55 million to spend on anything let alone a coin and, as mentioned, we all know that Russian items are defying “normal” market conditions. So how does this incredible sale make any difference to the hobby in general? Is it really worth getting excited about or simply something to be dismissed as a “blip” and to be ignored in the grand scheme of things? Personally I feel that something like this cannot and should not be ignored. Firstly you have the “Top Gear” factor I mentioned a couple of months ago—the fact that whilst most of us won’t ever own these rare and important coins we can always hope—and such hope is a hugely important factor in collecting, it keeps us going even when we know the chances of completing that date run or finding that die flaw are very slim indeed. However, it isn’t only hope that such a record price brings. On a more practical level, the huge sums paid for coins such as this are actually essential for our hobby and here’s why. Take a look at the housing market in the US and the UK at the moment—why has it ground to a halt? Simply because for one reason or another people have stopped spending, the money has dried up, houses aren’t selling, many people are staying put and those that need to sell are having to lower their prices. As those prices get lower so more people get scared about moving—fearing they’ll either lose on their current house or buy something today that they could get cheaper later on. So they too stay put. As they do so more pressure is put on the market, prices fall further and a downward spiral is created—all because money wasn’t put into the market in the first place. This record coin was sold at St James’s auctions in London, a company run by Knightsbridge Coins; Stephen Fenton, the owner of Knightsbridge Coins has been a coin dealer for many years. He’s a former Chairman of the BNTA and is passionate about the hobby, so it’s reasonable to assume that much of the money made for St James’s from this sale will be ploughed back into the coin market in general through acquisition of new stock, etc. This in turn keeps other dealers, other auction houses, in business and so they can continue to buy new stock for themselves. They are also able to buy from collectors keen to sell to finance new purchases— those collectors then make their new purchases from other dealers and so on. . . the money is kept in the system and our market remains buoyant—no housing style crash here! As well as this, you can guarantee that the sale of such a coin will attract the attention of other buyers—even if only those looking for investment potential, after all, if coins start making this much money they are going to look very attractive to those with serious money of their own. Of course, we never advocate buying purely for investment but in this day and age we are happy to see money coming into the hobby from any quarter! Then you’ve got the “just missed out” factor. The sale of this coin at £1.55 million meant that at least two people were prepared to spend serious money on coins—the one (or more) that missed out on the purchase might very well be prepared to use the money they had earmarked for this sale to buy other coins. This will inevitably mean someone else “misses out” again, so they in turn may well use their funds to buy coins from another dealer, another auction house, at another time, and so on—the market continues to thrive.

So you see that whilst an incredible record like the one set in London on November 6, 2008 might seem irrelevant to, say, a collector from Yorkshire, a few months later in fact it isn’t at all; for many of us the ripple effect such a sale has on the hobby means that at some point we all benefit. It might seem like “pie in the sky” now but in fact we could all end up with a slice!

A full report of the incredible St James’s sale will appear in “Market Scene” next month.

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